Baltic
Dry Index. 1952 -23 Brent Crude 76.68
Spot Gold 3397 US 2 Year Yield 3.94 -0.03
US Federal Debt. 36.992 trillion
US GDP 30.078 trillion.
Gold is money. Everything else is credit.
J. P. Morgan
The media is full of suggestions that Trump is about to join in Israel’s war on Iran, upholding a long tradition of the USA joining wars late, long after the war could have ended earlier or possibly have been prevented at all.
What this means for the rest of the world, if it happens, is an open question, but if it ends the war between Israel and Iraq, the monstrosity of Gaza and brings an end to the tragedy of Ukraine, it will be worth it. But that’s not a certainty.
In market news, the Fed gets to announce its key interest rate later today, the BOE tomorrow. Both, overdue a rate cut, but both, likely to disappoint.
Look away from that rising crude oil price now.
Asia-Pacific markets trade mixed as Iran-Israel
conflict dents investor sentiment
Updated Wed, Jun 18 2025 12:07 AM EDT
Asia-Pacific markets traded mixed
Wednesday, as escalating tensions between Israel and Iran weigh on investor
sentiment.
Adding fuel to fire, U.S. President Donald Trump is mulling
a military strike on Iran, while demanding the country’s leader Ayatollah
Ali Khamenei “surrender,” former and current U.S. officials told NBC News.
Trump, in a post on Truth Social, demanded
“UNCONDITIONAL SURRENDER!” by Iran.
“Comments from President Trump have
triggered speculation that the U.S. will get more involved in the conflict
between Iran and Israel that escalated significantly five days ago,” ANZ
analysts wrote in a note.
Japan’s benchmark Nikkei 225 added 0.47%, and
the Topix rose 0.4%. South Korea’s Kospi climbed 0.7% and the small-cap Kosdaq
was 0.66% higher.
Japan exports in May declined 1.7% year on
year, softer than the 3.8% decline expected by Reuters. The data comes a day
after the Bank of Japan highlighted in its monetary policy statement that the country’s
growth was likely to “moderate” on the back of factors like trade, which would
lead to a slowdown in overseas economies and a decline in domestic corporate
profits.
Australia’s S&P/ASX 200 was flat.
Hong Kong’s Hang Seng index lost 0.87%,
and mainland China’s CSI 300 was up 0.18%.
U.S. stock futures inched lower as traders
brace for the Federal Reserve’s rate decision due Wednesday afternoon
stateside.
Overnight on Wall Street, all three major
averages ended the trading day lower. the Dow Jones Industrial Average lost
299.29 points, or 0.70%, to close at 42,215.80. The S&P 500 shed 0.84% to end
at 5,982.72, while the Nasdaq
Composite fell 0.91% and settled at 19,521.09.
Asia-Pacific
markets today: Japan trade data
Trump weighs potential U.S. military strike on
Iran, demands ‘unconditional surrender’
Published Tue, Jun 17 2025 12:36 PM EDT Updated
Tue, Jun 17 2025 5:15 PM EDT
President Donald Trump is considering
whether to launch a military strike against Iran as he demands the country’s
leader, Ayatollah Ali Khamenei,
“surrender” in Tehran’s conflict with Israel, current and former
administration officials told NBC News on Tuesday.
A strike by the United States is one
option among a range that Trump is weighing after meeting with his top national
security advisors in the Situation Room on Tuesday afternoon, the officials
told NBC.
The meeting came hours after Trump warned
Khamenei that the U.S. knows “exactly” where he is “hiding.”
“Our patience is wearing thin,” Trump
wrote on Truth Social.
“He is an easy target, but is safe there -
We are not going to take him out (kill!), at least not for now,” Trump wrote
shortly after declaring “total control” over Iran’s airspace.
“But we don’t want missiles shot at
civilians, or American soldiers,” he wrote.
Trump in a subsequent post made clear what
he does want from Iran: “UNCONDITIONAL SURRENDER!”
The Trump administration has insisted that
the U.S. is not directly involved in what Israel called a preemptive strike
against Iran on Friday, which kicked off five days of missile fire between the
two regional powers.
But Trump’s latest comments suggest the
U.S. is now at least willing to threaten direct military intervention as it
backs Israel’s effort to bring Tehran to heel.
More
Trump
weighs Iran strike, demands surrender vs Israel
Dollar weakens as ‘confidence in US assets
continues to erode’
Tuesday 17 June 2025 11:58 am
The US dollar’s traditional safe-haven
status has continued to take a bruising, as investors shun the currency amid
rising global tensions.
The dollar index (DXY) – which tracks the
dollar’s value against a basket of currencies – has tumbled to around 98,
compared to nearly 110 at the beginning of the year, as the currency plunged to
a 30-year low.
Investors shun dollar amid geopolitical
tensions
“A clear divergence is taking shape,”
Antonio Ruggiero, senior FX & Macro Strategist at Convera said.
“This underscores how sentiment toward the
US economy is acting as a stronger drag than what has historically been a
dollar-positive force—higher oil prices, especially in periods of geopolitical risk. The result? Renewed selling pressure as
confidence in US assets continues to erode.”
The intensifying conflict in the Middle
East has exposed the dollar’s waning status as traditional safe-haven assets
like gold rallied.
The dollar would traditionally be expected
to rally in times of crisis, as investors flocked to safe havens. The DXY
surged over 20 per cent from July 2008 to March 2009, amid the global financial
turmoil.
George Vessey, macro strategist at
Convera, said: “The dollar’s failure to hold safe-haven demand, despite
deepening Israel-Iran tensions, underscores shifting Fed expectations and
crowded USD positioning.”
The dollar’s downturn has been pegged to
Trump’s ‘Liberation Day’ trade offensive that imposed sweeping levies on the US
trading partners.
Other currencies rallied on the back of
the weakened dollar as the Euro rose five per cent in the week following the
tariff announcement.
Analysts have
warned “dedollarisation” – where the currency’s influence on other
economies shrinks – has become a possible reality as the dollar’s woes
deepened.
More
Dollar
weakens as 'confidence in US assets continues to erode'
Gold outshines Treasurys, yen and Swiss franc as
the ultimate safe haven
Published Tue, Jun 17 2025 12:33 AM EDT Updated
Tue, Jun 17 2025 1:08 AM EDT
SINGAPORE — Gold has claimed the safe
haven crown. With spot prices surging 30% so far in 2025, bullion’s gains are
outpacing that of other traditional safe havens such as the Japanese yen, Swiss
franc, and U.S. Treasurys — compelling investors to rethink what true safety
looks like in the face of fiscal sustainability concerns and looming wars.
At the heart of gold’s appeal is its
freedom from government liabilities, market experts gathered at the annual Asia
Pacific Precious Metals Conference told CNBC on Monday.
“Gold’s key advantage is that it is no one
else’s liability,” said Nikos Kavalis, managing director at Metals Focus. “When
an investor owns Treasurys, other sovereign bonds and even currencies, they are
ultimately buying into the respective economy,” he said.
To take stock of the performance of other
typical safe havens since the start of the year: The dollar index, which
measures the value of the greenback against a basket of currencies, has
weakened close to 10% in the year to date. Safe haven currencies such as the
Japanese yen and Swiss franc strengthened about 8% and 10% against the
dollar, respectively, in the same period of time.
Yields on the benchmark 10-year U.S.
government bond is around 19 basis points lower in the year to date. Yields and
prices move inversely in the bond market, meaning lower yields equal higher
prices.
In contrast, gold prices have been
consistently notching fresh highs for months. Spot gold has gained around 30%
in the year to date, currently trading at $3,403.09 after peaking above $3,500
in April. Gold’s demand has been propelled by an atmosphere of instability and
uncertainty, especially with recent developments in the Middle East, on top of
dented demand for U.S. safe havens.
“There’s a growing sense of just not being
sure what the future of the U.S. dollar and U.S. Treasury market is going to
be. And I think that’s fueled a lot more interest in alternative safe havens
like gold,” said the World Gold Council’s global head of central banks, Shaokai
Fan.
Though the dollar and U.S. Treasurys have
historically served as a bastion of financial safety, cracks have been starting
to show.
U.S. Treasurys faced a steep sell-off in
April after
President Donald Trump’s “reciprocal” tariffs rollout. A subsequent exit from
long-dated U.S. debt in May after
Moody’s downgrade of the U.S.′ credit rating and Trump’s tax bill served as
another beating to Treasurys’ long-held reputation as a safe haven as
investors’ concerns about fiscal discipline heightened, with U.S. 30-year
yields breaking above the key 5%.
Demand for U.S. debt instruments has since
recovered slightly. However, confidence in U.S. assets has been compromised by
volatile policymaking in the world’s largest economy.
More
Gold outshines
Treasurys, yen and Swiss franc year-to-date
In other news, an oil and LNG price shock
next?
Shipping groups are starting to shy away from the
Strait of Hormuz as Israel-Iran conflict rages on
Published Tue, Jun 17 2025 2:24 AM EDT
Some shipowners are opting to steer clear
of the strategically important Strait of Hormuz, according to the
world’s largest shipping association, reflecting a growing sense of industry unease as the
Israel-Iran conflict rages on.
Israel’s surprise attack on Iran’s
military and nuclear infrastructure on Friday has been followed by four days of
escalating warfare between the regional foes.
That has prompted shipowners to exercise
an extra degree of caution in both the Red Sea and the Strait of Hormuz, a critical gateway to the
world’s oil industry — and a vital entry point for container ships calling at
Dubai’s massive Jebel Ali Port.
Jakob Larsen, head of security at Bimco,
which represents global shipowners, said the Israel-Iran conflict seems to be
escalating, causing concerns in the shipowner community and prompting a “modest
drop” in the number of ships sailing through the area.
Bimco, which typically doesn’t encourage
vessels to stay away from certain areas, said the situation has introduced an
element of uncertainty.
“Circumstances and risk tolerance vary
widely across shipowners. It appears that most shipowners currently choose to
proceed, while some seem to stay away,” Larsen told CNBC by email.
“During periods of heightened security
threats, freight rates and crew wages often rise, creating an economic
incentive for some to take the risk of passing through conflict zones. While
these dynamics may seem rudimentary, they are the very mechanisms that have
sustained global trade through conflicts and wars for centuries,” he added.
The Strait of Hormuz, which connects the
Persian Gulf to the Arabian Sea, is recognized as one of the world’s most
important oil chokepoints.
In 2023, oil flows through the
waterway averaged 20.9 million
barrels per day, according to the U.S. Energy Information Administration,
accounting for about 20% of global petroleum liquids consumption.
The inability of oil to traverse through
the Strait of Hormuz, even temporarily, can ratchet up global energy prices,
raise shipping costs and create significant supply delays.
Alongside oil, the Strait of Hormuz is
also key for global container trade. That’s because ports in this region (Jebel
Ali and Khor Fakkan) are transshipment hubs, which means they serve as
intermediary points in global shipping networks.
The majority of cargo volumes from those
ports are destined for Dubai, which has become a hub for the movement of
freight with feeder services in the Persian Gulf, South Asia and East Africa.
Peter Tirschwell, vice president for
maritime and trade at S&P Global Market Intelligence, said there have been
indications that shipping groups are starting to “shy away” from navigating the
Strait of Hormuz in recent days, without naming any specific firms.
“You could see the impact that the Houthi
rebels had on shipping through the Red Sea. Even though there [are] very few
recent attacks on shipping in that region, nevertheless the threat has sent the
vast majority of container trade moving around the south of Africa. That has
been happening for the past year,” Tirschwell told CNBC’s “Squawk Box Asia” on Monday.
“The ocean carriers have no plans to go
back in mass into the Red Sea and so, the very threat of military activity
around a narrow important routing like the Strait of Hormuz is going to be
enough to significantly disrupt shipping,” he added.
More
Israel-Iran:
Shipping groups shying away from the Strait of Hormuz
Tankers Front Eagle and Adalynn Collide
East of the Strait of Hormuz | Was GPS Spoofing the Cause?
Global Inflation/Stagflation/Recession
Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
Stagflation
threat returns as Israel-Iran conflict sparks fears oil price could spike above
$120
16
June 2025
There
are growing fears of another energy driven inflationary shock the economy, as
oil and gas prices continue to climb in response to Israel's conflict with
Iran.
Oil
prices were more subdued on Monday, trading at $73.52 a barrel, after trading
as $78 in the wake of Israel's initial strikes on Iranian target and the
subsequent retaliation from Tehran that threatens to destabilise energy markets
in the region.
Markets
fear the conflict hurt energy supply, particularly if there any disruption to
the Strait of Hormuz, a key transit chokepoint responsible for a third of
global seaborne oil and 20 per cent of liquified natural gas.
If
the straight between the Persian Gulf and the Gulf of Oman is compromised, oil
prices could be driven 'upwards' of $120, according to analysts at Lazard
Geopolitical Advisory.
'Even
in the absence of a Strait closure, oil markets will see continued volatility
as the risk of a disruption evolves,' they said.
Brent
crude prices are still down by around 11 per cent over the last year amid
increased OPEC+ supplies and weaker global economic growth.
And
oil prices are substantially below levels seen after Russia's invasion of
Ukraine led to a global inflationary spiral.
Gilles
Moëc, AXA group chief economist, said lower oil prices 'have been one of the
very few tailwinds benefiting the world economy recently', but escalating
conflict in the Middle East puts this at threat.
He
added: 'There are two parameters which we will closely monitor to assess the
risk of a persistent oil shock: how Gulf states – and particularly Saudi Arabia
– position themselves on oil supply, and the likelihood of a disruption in oil
flows through the Strait of Hormuz.'
The
UK imports much of its energy. British businesses rely on imported oil for
transportation and energy, so higher oil prices can be a major driver of
inflationary pressure.
Chancellor
Rachel Reeves on Sunday admitted that higher
energy prices are a 'cause for concern'.
Thomas
Pugh, economist at RSM UK, said: 'A rough rule of thumb is that a $10/bl rise
in the price of a barrel of oil eventually adds 0.1 per cent to inflation as higher
fuel prices make their way through the system.
'Natural
gas prices have also risen [in response to the Israel-Iran conflict], but by a
slightly smaller amount.
The
most immediate impact will be on prices at the pump. A $10/bl rise in oil
prices will probably result in a 5p increase in pump prices over the next
couple of months.'
Higher
oil prices will also give the Bank of England pause for thought on the outlook
for interest
rates as
it has to balance rising inflation with deteriorating economic output.
The
bank is set to keep base rate on hold at 4.25 per cent later this week but
investors have been pricing up to two more cuts of 25 basis point each this
year, taking the rate to 4.75 per cent. [Error, 3.75 percent.]
Pugh
added: 'The big risk is an escalation that disrupts energy supplies from the
region, which sends energy prices much higher.
'In
that case, a rerun of the 2022 energy crisis would be possible with higher
interest rates and another bout of stagnation or even recession.'
Stagflation threat
returns as Israel-Iran conflict sparks fears oil price could spike above $120
Covid-19
Corner
This
section will continue only occasionally when something of interest occurs.
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section. Updates as they get reported.
Chaos as 3 India-bound Boeing 787 Dreamliners hit with problems in
36 hours
17 June 2025
Three India-bound Boeing 787 Dreamliners have been forced to return back to base within
a 36-hour period after being hit with problems. The Air India passenger
jets -the same type as the aircraft involved in last week's tragedy in Ahmedabad-suffered a mix of issues from a bomb threat to a
technical glitch.
The planes were bound for Chennai,
Hyderabad and New Delhi. One of the aircrafts took off from Hong Kong as
normal, however, it was forced to turn back after the pilot reported technical
issues mid-air. Flight AI315 took off from Hong Kong at 12.06pm and landed just
over an hour later, according to tracking data on Flightradar24. It is unknown
at this time the cause of the suspected technical snag.
The airline said in a statement that the
flight landed safely in Hong Kong and all passengers disembarked from the
plane. An inspection of the aircraft is underway, it added.
A spokesperson for Air India said:
"AI315 operating from Hong Kong to Delhi on 16 June 2025 returned to Hong
Kong shortly after takeoff due to a technical issue. The flight landed safely
at Hong Kong and is undergoing checks as a matter of abundant precaution.
"Alternative arrangements have been
planned to fly the passengers to their destination Delhi at the earliest.
On Sunday, a British Airways flight from
London Heathrow to Chennai had to turn around mid-air when it suffered a
"technical issue".
The Boeing 787-8 Dreamliner was less
than an hour into its journey.
The airline's statement said: "The
flight landed safely with crew and customers disembarking as they normally
would, and our teams are working hard to get their journeys back on track as
soon as possible."
It comes just days after an Air India Dreamliner crashed shortly after take-off from Ahmedabad airport, killing
229 passengers and 12 crew, with one person surviving the crash.
Also on Sunday, a Hyderabad-bound
Lufthansa flight from Frankfurt returned to the German airport, midway through
the flight, following a bomb threat.
The flight LH752, also a Boeing 787
Dreamliner, took off from Germany around 2:14pm, local time, and was scheduled
to land at Hyderabad's Rajiv Gandhi International Airport in the early hours of
Monday morning.
Lufthansa says authorities were alerted
to a bomb threat on social media and the plane turned around as an
"abundance of caution".
The full statement read: "Out of an
abundance of caution, Lufthansa flight LH752 from Frankfurt to Hyderabad
returned to its point of departure after authorities were made aware of a bomb
threat posted on social media.
"Affected passengers were provided
with accommodation in Frankfurt and will be continuing their journey to
Hyderabad today."
Chaos as 3 India-bound Boeing 787 Dreamliners hit with problems in 36
hours
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt
Clocks (usdebtclock.org)
Anybody
has a right to evade taxes if he can get away with it. No citizen has a moral
obligation to assist in maintaining his government
J. P.
Morgan
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